Code of Practice for
Residential Property Buying Companies
Effective from 1 July 2014
This Code of Practice is mandatory for all TPO members who must display the above logo
and who purchase property directly from home owners. Copies of this Code of Practice
should be made available to sellers at the earliest opportunity. You should prominently
display the TPO logo in the window of all your offices and on your website.
The Office of Fair Trading previously distinguished between companies who buy in as
principals and those who broker a deal between a seller and a third party buyer. This Code
applies to companies who buy as principals. Buying Agents acting on the instructions of a
third party to source a property are covered by the Code of Practice for Buying Agents.
Contents:
1. General Provisions.
2. Lead Generation and Advertising.
3. Offers.
4. Purchase - Between Acceptance and Exchange.
5. Fees, Charges and Client Liability.
6. Conflict of Interest.
7. In-house Complaints Handling.
8. Referrals to the Ombudsman.
9. Non-Compliance with the Code.
10. Glossary of Terms.
All references to the masculine include the feminine, and to the singular include the
plural. Terms marked (*) - the first time they appear are defined in a Glossary of Terms
at Section 10.
1. General Provisions
Applicability
1a.
This Code applies to Property Buyers (*) in the United Kingdom provided by a person
or organisation who has agreed or is required to comply with it for the buying of
residential property.
General Obligations
1b.
You (*) must comply with this Code of Practice. You must comply with all relevant
laws relating to the purchase of residential property such as the Data Protection Act
1998, Unfair Terms in Consumer Contract Regulations 1999, Consumer Protection
from Unfair Trading Regulations 2008, Consumer Contracts (Information,
Cancellation and Additional Charges) Regulations 2013 and all other current and
relevant legislation.
1c.
You must ensure that all staff are fully conversant with all aspects of this Code of
Practice and their legal responsibilities. Such staff must observe this Code and their
legal responsibilities in all their dealings with consumers. Staff must have a good
working knowledge of all relevant legislation and familiarity with the basic purchase
process.
1d.
You should provide a service consistent with fairness, integrity and best practice; and
you should not seek business by methods that are oppressive or involve dishonesty,
deceit or misrepresentation. You must avoid any course of action that can be
construed as aggressive or harassment (*) behaviour.
1e.
You must treat consumers equally regardless of their race, religion or belief, sex,
sexual orientation, gender reassignment status disability or nationality. Unlawful
discrimination includes giving less favourable treatment because someone is perceived
to have one of these personal characteristics or because they are associated with a
person with such a characteristic.
1f.
You should take special care when dealing with consumers who might be
disadvantaged because of their age, infirmity, lack of knowledge, lack of linguistic
ability, economic circumstances or bereavement.
1g.
You must not release or misuse confidential information given by your client (*)
during the process buying a property (*) without your client's permission unless
legally required to do so.
1h.
You must keep clear and full written (*) records (*) of all transactions for a period of 6
years and produce them when required by the Ombudsman.
1i.
As a TPO Member you must not take, or be involved in any action which would bring
the scheme into disrepute.
Publicity
1j.
You must use and display such material promoting the Code of Practice as provided
by TPO. You should prominently display the TPO logo on the window of any offices,
your website and on relevant documentation such as marketing literature,
advertisements, and on your letterheads.
1k.
You must have available, free of charge, copies of this Code of Practice to give to
consumers on request.
Terms of Business and Service Provision
2. Lead Generation and Advertising
2a.
All advertisements must be legal, decent, honest and truthful in accordance with the
British Codes of Advertising and Sales Promotion and Direct Marketing.
2b.
You must not use unfair methods when seeking new clients by unsolicited
approaches. Any canvassing material must be truthful and must fully explain who the
message is from, its purposes and how the client’s interest can be followed up.
2c.
You must explain to the client the valuation, offer and purchase process before the
client is committed to the sale. You must clearly explain the limits of the service and
in particular advise that the sale will be at a discount to open market value.
2d.
You must not mislead about the type of service you provide, for example saying you
are the buyer of the property when you are not.
2e.
You must not mislead about the likely timescales for the sales process, for example
giving false or unrealistic timescales.
2f.
You must not mislead about how the purchase will be paid for. For example you
should not claim to be a cash buyer if you are in fact using mortgage finance.
2g.
You must not mislead about the price you are prepared to pay.
2h.
You must not mislead about how the property will be valued.
2i.
You must not train your staff to use scripts and/or techniques that are intended, or
likely, to mislead or pressurise home sellers.
2j.
You must not directly or indirectly harass (*) any person in order to gain agreement to
sell. Nor must you repeatedly try to gain agreement to sell in a way likely to cause
offence.
3. Offer
3a.
You must, at the point of offer, inform your client in writing (*) that you are a Member
(*) of the TPO scheme, and subscribe to this Code of Practice.
3b.
You must comply with the Consumer Protection from Unfair Trading Regulations
2008.
3c.
You must conduct valuations in a proper manner, fairly and in good faith.
3d.
You must never deliberately misrepresent the value of a property.
3e.
You must give your client written confirmation of any offer or amended offer for his
property. You must give the client written details of your Terms of Business including
your fees and charges before he is committed or has any liability towards you.
3f.
You must not mislead about the status of the offer and / or whether that offer is
subject to conditions or mortgage valuation.
3g.
Any fees and charges, restrictions and liabilities should be confirmed in writing
alongside the offer.
3h.
Any subsequent changes to the offer or withdrawal must be promptly confirmed in
writing as soon as you are aware of the need to amend the arrangements and the
client informed as to the reasons for the amendment.
3i.
The offer price should not be reduced late in the process without a valid reason and
these reasons should be fully explained to the client.
3j.
Your Terms of Business and your contract must be consistent with the provisions of
this Code of Practice and comply with the Unfair Terms in Consumer Contracts
Regulations 1999 (as amended).
3k.
Your Terms of Business should be written in plain and intelligible language.
3l.
You should keep a written or electronic contemporaneous record of all offers you
make including the date and time of such offers and the seller’s (or his appointed
representative’s) response.
3m.
By law you must not discriminate, or threaten to discriminate, against a prospective
client because that person declines to accept that you will (directly or indirectly)
provide related services to them, for example by making it a condition that the person
wanting to sell the property must use any other service provided by you or anyone
else.
4. Purchase
Between Acceptance and Exchange of Contracts
4a.
You must not transfer the purchase to a third party without your client’s permission. If
the client gives permission, you are liable for the actions of the sub-instructed party
and will be held responsible for any failures to comply with this Code of Practice by
that sub-instructed party even if that party is not a TPO Member.
4b.
Notwithstanding 4a above if you are instructed as a sub-party, you must continue to
act in accordance with all relevant provisions of this Code of Practice.
4c.
You must not reduce offer prices late in the process without a valid reason and you
must avoid putting undue pressure on the house seller which restricts their ability to
make free or informed choices
4d.
You must explain to sellers that they are free to use their own professional advisers.
Where there is a legitimate business case for the solicitor to be nominated by you,
you must disclose at the start of any transaction and before the seller is committed to
expenditure:


the reasons why their choice is limited
that either party may withdraw without penalty at that stage.
4e.
Your obligations to the client are to monitor progress of the sale and keep relevant
parties informed.
4f.
You must do everything within your power to ensure the clients favoured sale dates
are met.
4g.
You must ensure that purchase funds are in place and forwarded to solicitors in time
for agreed completion.
4h.
You must report information to the appropriate parties deemed helpful to bringing the
transaction to fruition.
4i.
You must keep written or electronic records of such activity.
5. Fees, Charges and Client Liability
5a.
All fees and additional costs, must be included in your Terms of Business alongside
your written offer. They must be fully explained, and clearly and unambiguously
stated in writing.
5b.
If you intend to charge the client a fee or recover costs for terminating a sale, you
must make this clear and specify the amount of the fee or the method of calculation
and additional costs and their purpose.
5c.
If you use a tie-in (option) agreement then the implications, costs and duration of this
should be clearly explained to the client. For example: how long any contractual
agreement will last, what costs/charges would apply if the seller pulls out, any notices
you will place at HM Land Registry, Registers of Scotland or Northern Ireland’s Land
and Property Services whilst the agreement is in place, and the effect of those
notices on the seller’s ability to sell to a different buyer at a later date
6. Conflict of Interest
6a.
You must offer suitable advice to meet the client’s aims and needs. Where the law
and the interests of the client conflicts, adherence to the law must prevail.
6b.
You must avoid a conflict of interest. You must disclose at the earliest opportunity in
writing to your client or any relevant third party any existing conflict of interest, or any
circumstances which might give rise to a conflict of interest.
6c.
If you intend to offer potential clients surveying, financial, investment, insurance,
conveyancing or other services or those of an associate (*) or connected person (*),
you must by law advise your clients either separately in writing or within your Terms
of Business.
6d.
The client has a duty of disclosure of any matter affecting the value or saleability or
otherwise the residential enjoyment of the property.
7. In-house Complaints Handling
7a.
You must maintain and operate an in-house complaints procedure. Such procedures
must be in writing; explain how to complain to your business and to the Ombudsman;
be readily available in any office for consumers; and be available for inspection by
the Ombudsman and/or TPO Limited.
7b.
All verbal and written complaints must be recorded by you at the time they are made.
7c.
You must agree to deal with any properly appointed representative of a Complainant
(*).
7d.
All written complaints must be acknowledged in writing within 3 working days and a
proper investigation promptly undertaken. A formal written outcome of your
investigation must be sent to the Complainant within 15 working days. A senior
member of staff not directly involved in the transaction should deal with the complaint
where that is possible.
7e.
If the Complainant remains dissatisfied, he must be told how he can further pursue
his complaint within your business. This should provide the opportunity for a speedy,
separate and detached review of the complaint by staff not directly involved in the
transaction where that is possible. Such a review must be sent to the Complainant
within 15 working days.
7f.
Following the conclusion of your investigation, a written statement of your final view,
and including any offer made, must be sent to the Complainant. This letter must also
tell the Complainant how the matter can be referred to the Ombudsman, pointing out
that any such referral by the Complainant must be made within 6 months of your final
view.
7g.
You must not imply that payment of any outstanding commission fee or additional
costs is a pre-condition of a review by the Ombudsman.
8. Referrals to the Ombudsman
8a.
You must co-operate with any investigations by the Ombudsman being conducted in
accordance with his Terms of Reference.
8b.
You must:

comply with any award and/or direction made by the Ombudsman against you
and accepted by the Complainant and which is binding upon you under the
Terms of Reference and

pay the Complainant the amount of any such award if accepted by the
Complainant within the period for payment required by the Ombudsman.
9. Non-Compliance with the Code
9a.
Cases of non-compliance will be dealt with by the Disciplinary and Standards
Committee (DSC) of the TPO Council.
9b.
The DSC will consider those cases brought to its attention by the Ombudsman,
acting within his Terms of Reference, where he considers there has been any single
flagrant breach and/or any persistent breaches of the Code by any Member Agent.
When considering such cases the DSC will also consider whether the conduct is
such that it raises issues concerning the Member’s continuing registration under the
Consumers, Estate Agents and Redress Act (CEARA) 2007.
9c.
The DSC will also consider cases of non-compliance where the monitoring process
at 9 above shows any single flagrant breach and/or any persistent breaches of the
Code, failure to complete monitoring or where it is considered that the Member has
brought the scheme into disrepute.
9d.
In these cases above, the DSC could issue:




9e.
An informal warning.
A formal warning.
A notice of dismissal from TPO Limited in writing
Levy a fine.
Any Member issued with a warning or sanction has the right to make a
representation to the DSC and after the final decision by that body shall, if necessary,
have the right to put the matter before an Appeals Committee made up of two
independent Council members (one of whom will act as Chair) and one Board
member. Such appeal must be made within 4 weeks of the issue of the warning or
sanction. Expulsion or suspension from the TPO voluntary scheme will not
necessarily result in loss of Consumers, Estate Agents and Redress Act registration.
10. Glossary of Terms
In this Code, the following interpretations and definitions apply:
10a.
Associate. Includes a brother, sister, husband, wife, civil partner, aunt, uncle,
nephew, niece, parents, grandparents, children and grandchildren. The definition
also includes business associates.
10b.
Client. A person who has sold you a property in the United Kingdom (excluding the
Channel Islands and the Isle of Man). Where appropriate, this definition includes a
client’s properly appointed representative.
10c.
Complainant. Someone who is an actual or potential seller of residential property
making a complaint against a TPO Member. Where appropriate, this definition
includes a Complainant’s properly appointed representative.
10d.
Connected Person. Includes:



Your employer or principal.
Your employee or agent.
Associates as defined in 10a.
10e.
Property Buyers. Any things done by any person in the course of a business
(including a business in which he is employed) pursuant to instructions received from
a Consumer (the "client") who wishes to sell any residential property in the United
Kingdom for the purpose of, achieving a sale of their property in a short and/or
certain timeframe.
10f.
Harass/Harassment. Means to act in a threatening or oppressive manner likely to
cause alarm, annoyance and/or distress.
10g.
Member. A Property Buying Company who is a Member of the TPO voluntary
scheme and who has undertaken to abide by all provisions of the Code of Practice.
10h.
Property or Residential Property. Means property (land and/or buildings) used, last
used, or to be used for residential purposes.
10i.
Records. Means all written correspondence, file notes, contracts and agreements in
hard copy or electronic communications including emails or faxes.
10j.
Written, in Writing. Includes typed or hand-written letters, records or notes, emails
and faxes.
10k.
You. Applies to all Property Buying Companies bound by this Code, and their staff
who facilitate the purchase.